Amber Rudd speech raises questions over DECC’s solar ambitions

The UK solar industry has hit back at comments made by new climate change minister Amber Rudd, with question marks being raised over DECC's level of ambition for solar after its changes to solar subsidies earlier this month.

Speaking at the Solar Energy UK B2B event in Birmingham this week, Rudd told the industry DECC’s ambition has ‘expanded’ and that the decision to remove large-scale solar farms from the Renewables Obligation (RO) scheme two years early would help deliver ‘best value for money to consumers’.

“As our Solar Strategy set out earlier this year, we have a high level of ambition for the sector,” said Rudd. “In fact, our level of ambition has expanded – we are expecting to see 10GW to 12GW deployed by 2020 and possibly more, especially if you, the industry, are able to bring costs down and drive further innovation between now and then.

“Indeed, if we’re able to reach grid parity by 2020, as I hope, then we could see solar really fly, not on bill payer funded subsidy, but as a real financially independent, cost competitive industry.”

Industry reaction

Edie was keen to get the solar industry’s view on this. Solarcentury’s head of public affairs Seb Berry was surprised by this apparent ‘expanded’ ambition from DECC, given its noticeable pull-back of the UK’s targets for solar deployment in the solar strategy.

“In the space of two years, the Government’s ‘ambition’ for solar has dropped from 22GW by 2020, to 20GW ‘within a decade’, to ‘possibly more than 12 GW by 2020’,” said Berry. “This is a surprising rowing back on Ministerial ambition, given the Solar Trade Association’s realistic push for solar PV to be ‘subsidy-free’ by the end of the next Parliament.

“Everyone also knows that the current EMR projection of 10-12 GW by 2020 needs revising upwards, but DECC has no plans to revisit this number until the Autumn 2015 annual review of the EMR delivery plan.”

Renewables Obligation

Rudd – who joined DECC in July – went onto validate the department’s controversial decision to close the RO scheme to solar farms above 5MW two years early; from April 2015.

She said: “we know that the industry was concerned by the proposals to close the RO to large scale solar.

“However, we have a responsibility to manage our support schemes effectively within the Levy Control Framework, so that the success of the solar sector is delivered in a way that delivers best value for money to consumers.

“But we have listened to you, the industry, heard your concerns, and while we have not been able to take on board all of your requests and suggestions, we have made some important changes.”

But Berry from Solarcentury disagrees; insisting that British solar needs a stable policy framework to retain its growth to drive down costs, so consumers see a direct reduction in their future electricity bills

“The core of our case has always been that the industry had every right to expect RO closure no earlier than 2017 and that any policy changes in the run up to 2017, including RO banding reviews, should avoid having a retrospective effect,” said Berry. “That principle is essential for maintaining investor confidence in all UK renewables, not simply the solar industry. DECCs response to the May RO consultation published in October fails to address both these key issues.”

Value for money

The Solar Trade Association (STA) echoes Berry’s viewpoint, with a spokesperson for the organisation adding: “The Minister’s natural enthusiasm for solar is warmly welcome and it is encouraging that she genuinely understands the potential of this technology. However, the fact is that solar is being singled out for unfair treatment by her Department, with no justification.

“DECC’s own figures show solar was taking just 1.3% of the RO budget in 2013. The Department has been strongly criticised by the Public Accounts Committee for allocating nearly 60% of its budget to just 8 projects, most of which are more expensive than solar. So it is quite wrong to claim that curbing the growth of solar is anything to do with value for money.”

What’s your view on this? Is Amber Rudd right to say DECC’s level of ambition for solar has expanded? Will the solar subsidy changes offer better value for money? Or is the new climate change minister misguided on both fronts? Leave a comment below and let us know your thoughts, or tweet us @edie.

Luke Nicholls

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